Various forms of credit cards have been around since the late 1800s when they were used for the convenience of regular customers in large department stores and by local merchants.

By the mid-1900s credit cards had evolved to resemble the type of card that we are familiar with today. Diners Club and American Express were the first to really open up the industry to consumers. It was largely as a result of the Marquette decision that interest rates changed rapidly in the industry in the late 1970s and into the 1980s.

Lenders found that by leaving interest rates much higher than might be available for installment loans the risk of default was not only cushioned but it virtually disappeared. High interest charges have encouraged some consumers to actually pay off their credit card balances in full before the end of each billing cycle.

Initially credit cards were used by travellers and other business people as a convenience but in recent years as they have become more commonplace they have become the accepted means of payment for everything from food and groceries to furniture and vacations.

Many consumers have noticed that their credit card interest rates increase seemingly as arbitrarily as their credit limits. The reason for this is appears be to enhance the write offs that the credit card company is going to be able to claim against taxes following default. If you are late with a payment your interest increases, if you are drawing cash advances (presumably you are broke) there are additional fees and interest amount charged.

Basically the higher the risk you present to the lender the higher the rate of interest you can expect to pay. As their risk (of lending you money) increases so do your costs of borrowing.

Insolvency laws are very complicated but we make them easy for you to understand. We tell you what you need to know very simply with handouts and other materials.